Asking for Business Without Asking for Trouble

Every customer interaction offers the opportunity for additional business. The fast-food giants learned this long ago with the now-cliché “You want fries with that?” Imagine if that faceless box at the drive-through could know not only that you are allergic to fries, but also that you have a sudden hankering for a hot apple pie.

Whether you call it business intelligence or just being customer-savvy, knowing more about each customer at the moment of contact can pay dividends and prevent catastrophe. For financial services companies, the stakes can be much higher than a lost pastry sale.

Critical decisions regarding creditworthiness, fraud prevention or lifelong customer loyalty can be made (or lost) with each transaction. Increasingly, these transactions are as anonymous as a drive-through order box. With more and more Net-savvy customers conducting business online or via mobile devices, the window for up-selling or making critical risk assessments is open very briefly.

Key information about past transactions, preferences and creditworthiness most likely exists in each financial service provider’s many disparate data repositories. Unfortunately, getting immediate access to that data and basing both transaction decisions and additional business opportunities on it have proven challenging.

These challenges can now be met by the ability to instantly prescreen each potential customer at the point of contact and to make sound decisions in real time. Broadly referred to as the “decisioning process,” these capabilities can be delivered via in a hosted environment for specific decision areas such as instant prescreen.

The decisioning process enables organizations to convert raw data into accurate and timely business decisions. By predicting both purchasing and payment behavior, lenders can identify applicants’ quality (screening out high-risk applicants) while simultaneously targeting the most receptive clients with the right offers.

Not only are the most eligible candidates presented with appropriate offers — such as a credit card with travel rewards targeted expressly to business travels — but the pricing and terms of each offer also can be tailored to maximize effectiveness and profit.

Instant prescreening can greatly increase response rates when compared with traditional direct-mail preapproved credit offers. Performing the screening process in seconds when the consumer is already engaged with the client — either online or face-to-face — allows offers such as preapproved credit or bundled services to be presented when the prospect is most responsive and in the market to purchase.

Instant prescreening becomes even more critical when used as an upstream filter to prevent fraud, increase revenue and minimize losses on applicants with the highest risk. Using powerful decisioning capabilities, the instant prescreen process accesses current credit information in real time via a “soft” inquiry (which doesn’t impact the customer’s credit report) and calculates predictive variables as well as fraud and risk scores.

The process then provides an assessment of whether a candidate should be prequalified and, if so, which specific offer best fits the customer’s needs. These scoring values can be set to adjustable thresholds depending on the value of the offer or the acceptable risk tolerance.

Because instant prescreening can be accessed through a hosted environment, a minimal capital investment is required. Clients need not devote their own resources toward sophisticated analysis applications; they can simply draw on those tools on demand. This provides greater flexibility in deploying decisioning strategies based on specific business needs, budgets and available resources.

Roger Ahern is senior director of Experian’s Decisioning as a Service.